The reduction in Value Added Tax from 12.5 per cent to 5 per cent on textile products and garments has not made much difference to local garment manufacturers in Gurgaon. Even though the Gurgaon-based players welcomed the move, according to them the mere duty cut will not make their units competitive or boost business in general.

While they agree that reduction of VAT, or any tax will reduce the overall input costs, more measures are required to push the industry’s growth, which has been bearing the brunt of economic slowdown and irreversible increase in various input factors by 30 to 35 per cent.

Another issue being faced by these traders is lack of level playing field. While small businesses in cities like Delhi can get away by selling goods without issuing a bill, avoiding getting stuck in the tax levy, since Gurgaon-based players mostly have their shops in malls, the sales are billed. Most of these textile and garment players are exporters or suppliers of branded products. Gurgaon and Manesar markets together contribute nearly 2 billion dollars (Over 12, 000 crores) business.